A Quantitative Process for Exploiting Earnings Volume 1: Trading Directional Option Spreads


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In addition to teaching you how to trade systematically, some of the things this book touches upon include how to trade options and option spreads around earnings releases. The strategies covered in this reading include, outright debit call and put positions, vertical bull call spreads, vertical bear put spreads, out-of-the-money (OTM) bull call butterflies, and OTM bear put butterflies. For each trade type, I teach you how to calculate maximum risk, how to position-size a trade for maximum loss, how to compute maximum reward, how to compute a target for the trade, how to calculate the projected profit for a trade, how to calculate the maximum reward-to-maximum risk ratio, how to compute the target reward-to-maximum risk ratio, how to compute the profit reward-to-maximum risk, how to execute trades via bracket orders, how to adjust and manage trades, how to analyze the options market to deduce market expectations, and how to incorporate chart analysis.